Apple seems to have taken the leading share of the emerging Internet video on demand market as sales of Blu-ray disc and DVDs continue to slip. According to a recently released NPD report, the conventional discs have dropped from 64% in 2011 to 61% in 2012, blaming lower average prices of discs as contributing to share declines. On the other hand, the market for digital downloads not tied to a physical disc continues to grow, increasing from 14% in 2011 to 165 of the home market in 2012. In turn, video on demand (VOD) services have also increased, growing from 11% to 12% of the consumer movie market across the last year.

Most of the VOD purchases and rentals (72%), are served up by pay TV operators, however NPD called attention to “electronic sell through” (EST), which makes up 16% of the VOD market, as “widely seen to be the next-generation video-ownership option.” NPD also called to attention to Internet VOD (iVOD) otherwise known as online digital rentals, which now consists of 12% of the VOD market. Based on the report, Apple’s iTunes “dominates the [larger] market for movie EST” while facing “more competition for iVOD rentals.”

Apple now takes 45% of unit share, following by Amazon’s Instant Video with 18%, which trails behind the Walmart-owned Vudo with 15%. Rounding out the top 5 is Microsoft’s Zune/Xbox with 14% share and other players (such as Google Play and Sony’s PlayStation Store) splitting the remaining 8% (with no other player competing for more than a 5% share).

Other things brought up in the report include the fact that there is a greater number of equal competitors in addition to Apple in the market, at least in terms of movie rentals. It also seems like consumers are using their dedicated game consoles less for movie rentals and instead turning to web and mobile-savvy platforms for their fixes instead.